Wichita, KS 67208
August 20, 2004

Letters Editor
Wichita Eagle
825 E. Douglas
Wichita, KS 67202

Dear Editor:

The Sedgwick County commission is wise in seeking public input on raising sales taxes for the newest downtown arena proposal. However, holding a vote in November is not wise for this deeply flawed proposal. Here are seven flaws:

1) The county has no additional sales tax authority under state law. Not for a 1 cent increase, or 1/2 cent, or even 1/4 cent. State law must be changed before any local sales tax can be raised by the county. This means the county is putting the cart before the horse instead of getting the state law changed and then holding a binding tax referendum. This vote will be advisory and not binding until the law is changed. Voters should approve any type of tax increase needed for an entertainment facility like the proposed arena or remodeling the Kansas Coliseum at a countywide tax referendum.

2) Arena proponents are citing the "temporary" nature of the sales tax increase that will be needed to fund this project. Sadly, as the state has demonstrated with the 2002 Graves tax hikes, these "temporary" tax hikes often become permanent. Why can't the facility issue be handled without placing an additional burden on taxpayers? A couple of years ago Wichita State University remodeled Koch Arena without tax funds and at a cost of only $25 million. This is less than 18 percent of the cost of the downtown arena proposal at $141.5 million.

3) The $141.5 million price tag for the proposed downtown arena complex is excessive. In the 2000 census 452,869 people lived in this county. This is an average cost of over $312 per person or almost $1,250 for the family of four in Sedgwick County.

4) Many other communities in our region have built larger facilities for much smaller price tags. The Oklahoma City arena seats 20,000 and had a price tag of $89 million. Why should Wichitans pay more for a smaller facility with downtown parking expenses and that will create new downtown traffic problems?

5) The downtown arena is not likely to generate the attendance needed to balance operating costs with revenues. Revenue forecasts for the arena are likely to miss revenue estimates, just like the downtown Exploration Place children's museum. Why do we need another expensive, money losing facility downtown that will require additional taxpayer subsidies?

6) Look at the problems with a number of other public arenas around the country. Most of these facilities had major league franchises located at these facilities and Wichita currently has none. We don't need to follow in the footsteps of the Kingdome, the Silverdome, or the Superdome.

7) Despite many claims, a downtown arena will not generate economic growth. Recently, Smith College sports economist Andrew Zimbalist said, "The independent economic research that's been done on the question of whether sports teams and sports facilities have an economic impact on an area has uniformly found that there is no positive impact. By having a sports team or a new stadium or arena, you don't increase the level of per capita income, and you don't increase the level of employment. There's no direct economic development benefit."

Jean Ross wrote for the Sacramento Bee July 25, 2004 saying, "economic studies show that sports facilities do not promote economic development and that public subsidies from arena and stadium construction do not 'pay for themselves' by generating increased tax revenues." Similar studies from the Heartland Institute and Cato Institute agree. An excellent book by Mark Rosentraub, "Major League Losers," details the flaws in arena and stadium proponents' claims that have been repeated throughout the United States.

Construction of a new arena may provide some sizable temporary benefits to the firms winning the construction contracts. Zimbalist said, "...there are economic interests, particularly private interests, that do benefit from having a team or stadium. I'm thinking, certainly, of construction companies, general contractors, architectural firms, investment bankers who float the bonds to finance new stadiums, lawyers who work for the investment bankers, maybe restaurant and hotel interests. And, of course, there's the team owner."

The overall community will lose as private funds are taxed during the construction of a new arena and shifted to the government to pay for this spending. This will also shift public funds from other areas to help pay for this "entertainment" project. The latest arena proposal suffers from all of these flaws and should be rejected by county voters.

Sincerely,
Karl Peterjohn
Exec. Dir.